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Monday, January 31, 2011

Can your unit be liened individually for work performed on the common elements?

The Victoria Group was a company hired by the Parc Central Aventura East Condominium Association to provide cleaning, maintenance, concierge and security services for the condominium building through a series of three separate contracts over thirteen months from January 31, 2008, through the end of February, 2009. Specifically, the Victoria Group was to provide “standard residential cleaning, maintenance & concierge services to all common areas of the building entrance and lobby, pool area, club house, gym, activity rooms and lavatories”. They were also hired to provide “concierge, engineering, administrative assistant services to the building” seven days a week.

At some point, the Victoria Group claimed that they were not paid amounts owed under the contract(s) and attempted to encumber more than 100 condominium units at Parc Central Aventura East by filing liens against same for payment of $280,737.27 owed by the association. The lower Court granted Summary Judgment and a Final Judgment of Foreclosure of the claim of lien filed by the Victoria Group. The association appealed that decision in the Third DCA. The case is Parc Central Aventura East Condominium v. Victoria Group Services, LLC et al, 36 FLW D149.

The Victoria Group asserted that it had the right to file its Claim of Lien for the monies owed pursuant to Chapter 713 (aka the Mechanics’ Lien Statute) as well as Section 718.121 of the Condominium Act. The well-established function of the Mechanics’ Lien Statute is to “protect those who have provided labor and materials for the improvement of real property.” Section 713.01(15) of the Mechanics’ Lien Statute defines an “improvement” to mean “any building, structure, construction, demolition, excavation, solid-waste removal, landscaping or any part thereof existing, built, erected, placed, made, or done on land or other real property for its permanent benefit.”

In this case, the 3rd DCA admitted that the case law was sparse while stating that the 4th DCA relied on the 3rd’s analysis years prior by concluding that lawn mowing and shrubbery cutting services were not lienable under the Mechanics’ Lien Statute. The 3rd DCA further pointed to an Illinois appellate decision from 1996 which held that mere maintenance of property is not lienable. The court in the Parc Central case also rejected the argument that the lien being sought was justified under Section 718.121 of the Condominium Act. The lower court’s Final Judgment of Foreclosure was reversed by the Third DCA but the money judgment sought was upheld against the association.

Ultimately, the Victoria Group can seek enforcement of its money judgment against this association in ways other than foreclosing a claim of lien against the common elements and individual units. Vendors seeking to file claims of lien under the Mechanics’ Lien Statute in Florida are well advised to determine first whether such lien is permitted by Chapter 713 lest they wind up facing a Slander of Title claim from either the association or the individual unit owners. There is no doubt that any Parc Central owners attempting to sell their units while the lien remained on their units were forced to escrow funds to eventually pay off their pro-rata share of the lien or they risked losing the sale.

The moral of this story: problems arising from contracts pertaining to the common elements can have wide-ranging ripple effects that impact individual unit owners.

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